Whitmer's $60B budget, gas tax criticized by GOP

Kate Carlson @SentinelKate

Thursday

Mar 7, 2019 at 9:00 AM

LANSING — Gov. Gretchen Whitmer's proposed $60.2 billion state budget for fiscal year 2020 is under fire from Republican lawmakers.

The budget proposal is a 3.6 percent increase compared to the 2019 budget. It would provide $507 million more for K-12 schools and includes a massive 45-cent state gas tax increase for road repair. The budget was presented Tuesday by Whitmer and State Budget Director Chris Kolb to a joint session of the House and Senate Appropriations committees.

Michigan has the ninth-highest combined local, state and federal gas taxes in the U.S., according to the American Petroleum Institute. If Whitmer's plan is adopted, Michigan will have the highest rate.

Whitmer’s proposed 45-cent gas tax will raise the price of gas by 15 cents three times from Oct. 1, 2019, through Oct. 1, 2020, expected to generate $2.5 billion in new annual revenue. This will be deposited into a new fund allocated to the most highly traveled and commercially important roads.

To offset the cost of the gas tax, Whitmer is proposing doubling the Earned Income Tax Credit for low and middle-income people from 6 to 12 percent.

State Rep. Thomas Albert, R-Lowell, said progress has been made in attacking the debt issue, which should continue under the new governor.

“Gov. Whitmer is proposing to nearly triple the fuel tax for road repairs and other budget items," Albert said. "While Michigan needs a real and meaningful solution to fix our roads, this is not it. Despite the governor trying to sell measures that would lessen the impact on the wallets of some taxpayers, this plan will hurt Michigan families, businesses and future generations. I am committed to finding a solution to fix our roads that works for Michiganders and I look forward to working with my colleagues on this during the budget process.”

Albert represents the 86th District, which includes portions of Kent and Ionia counties including, the City of Ionia.

"Nobody likes taxes," Whitmer told lawmakers Tuesday, according to Associated Press reports. “I wish I didn’t have to come here today and put this budget before you because I know it’s hard. But the hard truth is we got to get to work. Every day we don’t we are jeopardizing our economic future, wasting our money and endangering our people. No more shell games and half measures. Here’s a real plan.”

Whitmer kicked off a statewide tour on Wednesday to promote her budget plan. She met with the Grand Rapids Chamber of Commerce and toured the Plumbers and Pipefitters Training Center in Coopersville to discuss her plans to invest in fixing roads, improving education, closing the skills gap and cleaning Michigan’s drinking water outlined in the budget proposal.

The Democratic governor’s budget would also repeal the unpopular pension tax introduced by her predecessor, and replace revenues lost by taxing businesses exempted from the corporate income tax.

Republican Senate Majority Leader Mike Shirkey said Wednesday that "taking actions like that would be doubling down on stupid." Michigan shouldn't return to "old" tax policies and must stay focused "on what we've been doing the last eight years," Shirkey, R-Clarklake, said according to Associated Press reports.

He also said drivers can not absorb Whitmer's fuel tax, though he agrees $2.5 billion is needed to fix roads.

Whitmer also proposed no longer diverting hundreds of millions in general funds to the transportation budget, saying it should go to universities.

The $507 million boost in K-12 spending for the next fiscal year will include extra funding to teach at-risk, special education, and career and technical students. Whitmer wants to make more 4-year-olds eligible for publicly funded preschool.

A separate proposal for the current fiscal year includes a $120 million infusion to improve drinking water infrastructure in the state where Flint’s crisis occurred and $60 million to install hydration stations in schools.

Michigan Chamber of Commerce President and CEO Rich Studley, whose group has sway with GOP legislators, commended Whitmer and said he was prepared to support a “meaningful increase in user fees phased in over time," according to the Associated Press.